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How much is that in $AUD?

How much is that in $AUD?

Have you looked at buying an item in Australia compared to buying it online? Often the online price needs to be converted to Australian dollars (AUD). Listen to Sarah Larsen describe the value of the 'Aussie' dollar compared to the US dollar (USD) and why the value keeps on changing. This clip provides a context to calculate ratios.

Things to think about

1

Before viewing

The value of the Australian dollar against other currencies such as the USD, the Japanese yen and the British pound changes all the time depending on a number of things.

For these three currencies find out how much one Australian dollar is worth. Also find out how many Australian dollars you would get for one USD, one Japanese yen and one British pound.

2

As you view

The reporter, Sarah Larsen says that over the past 10 years the average value of the Australian dollar has been 0.70 USD. This means that, if you exchanged Australian dollars for US dollars, for every 100 AUD you would receive 70 USD. Exchanging 250 AUD would give you 250 / 100 x 70 = 175 USD.

If you were buying an item online from the US, would you rather a higher, or a lower, Australian dollar? Why?

3

After viewing

If you made a car in Australia and needed to sell it for 15,000 AUD, how many USD would you need to sell it for in the US?

At an exchange rate of 1 AUD : 0.70 USD the car would cost 15, 000 x 0.7 = 10,500 USD. What would it cost if the exchange rate was 1 AUD : 0.60 USD?

What if the exchange rate was 1 AUD : 1.10 USD? Do you think you would sell more cars in the US when the Australian dollar was low (1 : 0.60) or high (1 : 1.10)?

4

Next steps

Design a fictional product, give it a name and a purpose and set a price in Australian dollars.

Now make a chart that shows the cost of your product in USD (on the vertical axis) for different exchange rates (on the horizontal axis). Start with a rate of 1 AUD : 0.50 USD and go all the way up to 1 AUD : 1.20 USD.

Transcript

00:00:00:00NATHAN BAZLEY:If you've caught the news in the past week or two you might have heard a bit about the Aussie dollar being pretty high right now. But it's not just something for finance experts and accountants to get excited about. Believe it or not, the value of the dollar may affect you and your family. Why do we pay so much attention to the US dollar? And how does it affect you? Sarah got out her calculator and came up with the answer.00:00:23:13SARAH LARSEN:What can you get for a dollar? Or how about 98 US cents? Maybe if you could get to the States that would be helpful. But we're a long way from the US so why are we so concerned with US dollars? You know what I mean?00:00:40:20MAN:The Aussie dollar is sitting at 95.8 US cents tonight, having been above 96.00:00:46:13SARAH LARSEN:And why does the value change so much? The answer can be found back in time. Way, way back in the old days money was made from precious metals like gold and silver. They're valuable just about everywhere, so no matter where you went in the world your money would be worth something. Then they started to make money out of less valuable things - copper and nickel and paper and cloth. So people had to agree on how much it would be worth. The US decided to measure the value of its dollar against gold. That made its value pretty trustworthy because you could always swap your notes and coins for solid, valuable gold. After World War II, other countries decided to measure their money against the US dollar. It became the standard currency that lots of things were traded in. Eventually it was so trusted that they didn't need gold. Instead they let the markets decide how much a dollar would be worth. Yep, money is traded in financial markets just like everything else. The more people want it, the more it's worth, and people want it when the economy's doing well. Except right now, the US economy isn't doing so well. Lots of people are unemployed and the country's in a lot of debt. So their dollar has gone down in value. Here in Australia it's a different story. We've got lots of natural resources which are bringing in money, unemployment is low people are spending. The economy's going well, so more people want Aussie dollars. The result?00:02:30:07MAN:The Aussie went above 99 US cents for the second time in a week and is currently trading half a cent below that level.00:02:36:15SARAH LARSEN:That's way higher than usual. The average value of the Aussie dollar over the past ten years has been about 70 cents. Now some people reckon it could get to one a whole dollar. That's called PARITY and if it happens, you'll hear all about it. It's actually a pretty big deal. And it affects a lot of people. Remember that a lot of trading is done in US dollars. So imagine you're trying to sell something overseas like fashion or cars. If the Aussie dollar is high it's going to cost other countries more to buy your stuff. It might mean that some big companies lose profits and that affects the whole economy. But there's good news too, especially if you want to go on an holidays overseas. You'll be able to exchange your Aussie dollars and get more US dollars in return. Or if you want to buy something from overseas a high Aussie dollar means imported things like electronics eventually get cheaper. So your Aussie dollar will buy even more!

For teachers

Year 8 Mathematics Strand: Number and AlgebraSubstrand: Real numbersContent code: ACMNA188Description: Solve a range of problems involving rates and ratios, with and without digital technologies

What to view next:

How much is that in $AUD?

Overview

Have you looked at buying an item in Australia compared to buying it online? Often the online price needs to be converted to Australian dollars (AUD). Listen to Sarah Larsen describe the value of the 'Aussie' dollar compared to the US dollar (USD) and why the value keeps on changing. This clip provides a context to calculate ratios.

Things to think about

Before viewing

The value of the Australian dollar against other currencies such as the USD, the Japanese yen and the British pound changes all the time depending on a number of things.

For these three currencies find out how much one Australian dollar is worth. Also find out how many Australian dollars you would get for one USD, one Japanese yen and one British pound.

2

As you view

The reporter, Sarah Larsen says that over the past 10 years the average value of the Australian dollar has been 0.70 USD. This means that, if you exchanged Australian dollars for US dollars, for every 100 AUD you would receive 70 USD. Exchanging 250 AUD would give you 250 / 100 x 70 = 175 USD.

If you were buying an item online from the US, would you rather a higher, or a lower, Australian dollar? Why?

3

After viewing

If you made a car in Australia and needed to sell it for 15,000 AUD, how many USD would you need to sell it for in the US?

At an exchange rate of 1 AUD : 0.70 USD the car would cost 15, 000 x 0.7 = 10,500 USD. What would it cost if the exchange rate was 1 AUD : 0.60 USD?

What if the exchange rate was 1 AUD : 1.10 USD? Do you think you would sell more cars in the US when the Australian dollar was low (1 : 0.60) or high (1 : 1.10)?

4

Next steps

Design a fictional product, give it a name and a purpose and set a price in Australian dollars.

Now make a chart that shows the cost of your product in USD (on the vertical axis) for different exchange rates (on the horizontal axis). Start with a rate of 1 AUD : 0.50 USD and go all the way up to 1 AUD : 1.20 USD.

Transcript

00:00:00:00NATHAN BAZLEY:If you've caught the news in the past week or two you might have heard a bit about the Aussie dollar being pretty high right now. But it's not just something for finance experts and accountants to get excited about. Believe it or not, the value of the dollar may affect you and your family. Why do we pay so much attention to the US dollar? And how does it affect you? Sarah got out her calculator and came up with the answer.00:00:23:13SARAH LARSEN:What can you get for a dollar? Or how about 98 US cents? Maybe if you could get to the States that would be helpful. But we're a long way from the US so why are we so concerned with US dollars? You know what I mean?00:00:40:20MAN:The Aussie dollar is sitting at 95.8 US cents tonight, having been above 96.00:00:46:13SARAH LARSEN:And why does the value change so much? The answer can be found back in time. Way, way back in the old days money was made from precious metals like gold and silver. They're valuable just about everywhere, so no matter where you went in the world your money would be worth something. Then they started to make money out of less valuable things - copper and nickel and paper and cloth. So people had to agree on how much it would be worth. The US decided to measure the value of its dollar against gold. That made its value pretty trustworthy because you could always swap your notes and coins for solid, valuable gold. After World War II, other countries decided to measure their money against the US dollar. It became the standard currency that lots of things were traded in. Eventually it was so trusted that they didn't need gold. Instead they let the markets decide how much a dollar would be worth. Yep, money is traded in financial markets just like everything else. The more people want it, the more it's worth, and people want it when the economy's doing well. Except right now, the US economy isn't doing so well. Lots of people are unemployed and the country's in a lot of debt. So their dollar has gone down in value. Here in Australia it's a different story. We've got lots of natural resources which are bringing in money, unemployment is low people are spending. The economy's going well, so more people want Aussie dollars. The result?00:02:30:07MAN:The Aussie went above 99 US cents for the second time in a week and is currently trading half a cent below that level.00:02:36:15SARAH LARSEN:That's way higher than usual. The average value of the Aussie dollar over the past ten years has been about 70 cents. Now some people reckon it could get to one a whole dollar. That's called PARITY and if it happens, you'll hear all about it. It's actually a pretty big deal. And it affects a lot of people. Remember that a lot of trading is done in US dollars. So imagine you're trying to sell something overseas like fashion or cars. If the Aussie dollar is high it's going to cost other countries more to buy your stuff. It might mean that some big companies lose profits and that affects the whole economy. But there's good news too, especially if you want to go on an holidays overseas. You'll be able to exchange your Aussie dollars and get more US dollars in return. Or if you want to buy something from overseas a high Aussie dollar means imported things like electronics eventually get cheaper. So your Aussie dollar will buy even more!

For teachers

Mathematics: Year 8Strand: Number and AlgebraSubstrand: Real numbersContent code: ACMNA188Content description:Solve a range of problems involving rates and ratios, with and without digital technologies